Nebraska Revised Statute 48-116
Employers; evasion of law; what constitutes; exceptions.
Any person, firm, or corporation creating or carrying into operation any scheme, artifice, or device to enable him or her, them, or it to execute work without being responsible to the workers for the provisions of the Nebraska Workers' Compensation Act shall be included in the term employer, and with the immediate employer shall be jointly and severally liable to pay the compensation herein provided for and be subject to all the provisions of such act. This section, however, shall not be construed as applying to an owner who lets a contract to a contractor in good faith, or a contractor, who, in good faith, lets to a subcontractor a portion of his or her contract, if the owner or principal contractor, as the case may be, requires the contractor or subcontractor, respectively, to procure a policy or policies of insurance from an insurance company licensed to write such insurance in this state, which policy or policies of insurance shall guarantee payment of compensation according to the Nebraska Workers' Compensation Act to injured workers.
- Laws 1913, c. 198, § 16, p. 584;
- R.S.1913, § 3657;
- C.S.1922, § 3039;
- C.S.1929, § 48-116;
- R.S.1943, § 48-116;
- Laws 1986, LB 811, § 35.
1. Scheme, artifice, or device
2. Carrying of insurance
3. Effect of election
1. Scheme, artifice, or device
There was insufficient evidence presented by the plaintiff to prove that the defendant employed a scheme, artifice, or device by either conferring the actual employer with apparent authority through manifestations to the homeowner or entering a joint venture with the actual employer. Kohout v. Bennett Constr., 296 Neb. 608, 894 N.W.2d 821 (2017).
There was no evidence in this case that the contract between the parties that controlled their relationship was a sham to conceal the true arrangement of the parties. Spulak v. Estep, 216 Neb. 523, 344 N.W.2d 475 (1984).
School (an owner of property on which the work is performed) was not liable as a statutory employer by virtue of section 48-116 where the work being done by the independent contractor would not ordinarily be done by employees of the owner in view of the owner's past practices and the practices of employers in comparable businesses, regardless of whether the owner's employees could have done the work. Overruling a portion of Sherlock v. Sherlock, 112 Neb. 797, 201 N.W. 645 (1924). Franklin v. Pawley, 215 Neb. 624, 340 N.W.2d 156 (1983).
Dealer's agreement for sale of seed corn was not an arrangement to evade provisions of Workmen's Compensation Act. Bohy v. Pfister Hybrid Co., 179 Neb. 337, 138 N.W.2d 23 (1965).
Burden is on workman to prove by a preponderance of evidence that employer set up a scheme, artifice, or device to defeat provisions of workmen's compensation law. O'Brien v. Barnard, 145 Neb. 596, 17 N.W.2d 611 (1945).
Owner of residence, who employs workman to remodel and move it, is not an employer within the Workmen's Compensation Act, even though the sole income of the owner is derived from rental of property. Retzlaff v. Dickinson, 141 Neb. 136, 2 N.W.2d 922 (1942).
Where liability would not attach if employment was direct, proviso constituting as employer person using scheme, artifice, or device to escape responsibility does not apply. McConnell v. Johnston, 139 Neb. 619, 298 N.W. 346 (1941).
Where city furnished materials and equipment for a W.P.A. project, but had no authority to control the details of the work or to direct the mode and manner of doing it, the arrangement did not constitute a device to enable the city to execute work without being responsible. Williams v. City of Wymore, 138 Neb. 256, 292 N.W. 726 (1940).
Scheme, artifice, or device do not necessarily imply fraud, and agreement of independent contractor to protect corporation employing him from liability for injuries to employees is a device. Sherlock v. Sherlock, 112 Neb. 797, 201 N.W. 645 (1924).
A statutory employer is a principal who employs a scheme, artifice, or device to avoid workmen's compensation law. Petznick v. United States, 575 F.Supp. 698 (D. Neb. 1983).
2. Carrying of insurance
When one employs an uninsured contractor, he becomes an employer under the terms of the Workmen's Compensation Act, and is entitled to the protection of the provisions thereof as to what acts are covered and what are not. Wilbur v. Adams Lumber Co., 140 Neb. 48, 299 N.W. 268 (1941).
The liability of a third party for failing to require a contractor to carry compensation insurance is an imputed one, and separate notice of accident and claim for compensation from that given to contractor is not required. Dobesh v. Associated Asphalt Contractors, Inc., 138 Neb. 117, 292 N.W. 59 (1940).
An unperformed agreement by contractor to carry compensation insurance does not relieve owner from liability. Hiestand v. Ristau, 135 Neb. 881, 284 N.W. 756 (1939).
Owner of building, used in conducting owner's business, who contracts with contractor for certain repairs to said building is an employer within the terms of statute unless it be shown that the contractor was required to procure compensation insurance for protection of his employees. New Masonic Temple Assn. v. Globe Indemnity Co., 134 Neb. 731, 279 N.W. 475 (1938).
Owner of building used in conducting owner's business who enters into contract with contractor for certain repairs is an employer within meaning of law unless it be shown that the contractor was required to procure compensation insurance for protection of his employees. Jones v. Rossbach Coal Co., 130 Neb. 302, 264 N.W. 877 (1936).
Where evidence failed to establish that minor son had been emancipated or that direct contract of hire existed between father and son, county which had contracted with father to do road work was not liable to minor because it failed to require the father to carry insurance. Holt County v. Mullen, 126 Neb. 102, 252 N.W. 799 (1934).
County letting contract without requiring contractor to furnish insurance policy protecting contractor's employees, is jointly liable with contractor to its employee who received compensable injury. Standish v. Larsen-Merryweather Co., 124 Neb. 197, 245 N.W. 606 (1932).
Section does not include owner who requires contractor to take out compensation insurance, or contractor who requires subcontractor to do so. Matthews v. G. A. Crancer Co., 117 Neb. 805, 223 N.W. 661 (1929).
Contention that defendants became employer within compensation law, by failure to require insurance to be taken out, was not sustained by evidence. Petrow & Giannou v. Shewan, 108 Neb. 466, 187 N.W. 940 (1922).
3. Effect of election
An employee who has properly elected not to come under part II of the Workmen's Compensation Act, cannot recover compensation from owner and owner does not become employer, even though owner does not require immediate employer to carry compensation insurance. White v. National Window Cleaning Co., 132 Neb. 155, 271 N.W. 341 (1937).
The party claiming to be an employee under this section has the burden of proof to show that he or she is in fact an employee of the subcontractor and that the principal contractor has failed to ensure that the subcontractor carries workers' compensation insurance. Aboytes-Mosqueda v. LFA Inc., 306 Neb. 277, 944 N.W.2d 765 (2020).
The statutory employer provisions of this section do not supersede the exemption provisions of section 48-106(2). Nussbaum v. Wright, 217 Neb. 712, 350 N.W.2d 559 (1984).
General test of whether work being done by an independent contractor is within this section is whether the work would ordinarily be done by employees of the owner in view of the owner's past practices and the practices of employers in comparable businesses. Rogers v. Hansen, 211 Neb. 132, 317 N.W.2d 905 (1982).
A statutory employer who pays benefits under the joint and several liability created by this section is entitled to indemnity from the actual employer. Duffy Brothers Constr. Co. v. Pistone Builders, Inc., 207 Neb. 360, 299 N.W.2d 170 (1980).
Immediate employer is not a necessary party to a proceeding against a statutory employer. Gardner v. Kothe, 172 Neb. 364, 109 N.W.2d 405 (1961).
Independent contractor employing farm labor was not subject to act. Keith v. Wilson, 165 Neb. 58, 84 N.W.2d 192 (1957).
This section has no application to the relation of a bona fide vendor and vendee. Heider v. Stoughton, 150 Neb. 741, 35 N.W.2d 814 (1949).
County was employer of workman on county road project, even though workman was hired by foreman employed by city and even though no record was made of oral authorization to employ help. Steward v. Deuel County, 137 Neb. 516, 289 N.W. 877 (1940).
Owners of building may be liable as third persons for death of workman through their negligence while in service of lessee's contractor. Tralle v. Hartman Furn. & Carpet Co., 116 Neb. 418, 217 N.W. 952 (1928).